The outlook for the Philadelphia real estate market this 2020 is that it will be, to a huge degree, scorching hot. And, for sellers, this can only be a good thing, not least because there’s been an increasing amount of pushback against one tactic that’s being used by some sellers to get a competitive edge in the market.
It’s been widely known that some sellers attempt to close deals early by bypassing the normal channels by which properties are introduced to the public. They often do this by posting listings to social media, or to some other platform that can only be accessed by a few buyers, before sharing it to the wider market. This strategy is called ‘pocket listing,’ and the benefit to the seller, of course, is that it allows them to test run a property before making it available on a multiple listing service, where other brokers can grab a piece of the pie. This allows sellers to close deals early, but critics of the strategy argue that it ultimately hurts buyers and sellers by limiting the competition.
Bright MLS, a property listing service that provides subscribers with access to the listing information of around 95,000 real estate professionals in the Mid-Atlantic region, initiated moves to clamp down on the tactic of pocket listing last October. One such move was to require agents to submit listings to their platform within a day of marketing it publicly—indeed, they even threatened a fine of $5,000 to every agent and financial advisor who failed to follow suit. In the weeks that followed, the National Association of Realtors made similar moves in a bid to stop pocket listings. In a report from the Inquirer, however, Real estate start-up Compass called the regulations enacted by these companies against pocket listing “unlawful, anti-consumer, and anti-competitive.”
So, are pocket listings unfair? And, should they be banned?
There are two popular arguments on the table, the first of which agrees with the policies that have been enacted to clamp down on what some describe as the invidious practice of pocket listing, while the second calls for a few changes to the new policies.
Yes, Pocket Listing is Unfair and Should be Banned
Theoretically speaking, opening a piece of property to as many prospective buyers as possible will get the seller the best value. After all, what reason is there to open a home to a few prospective buyers when one can open it to a lot more? Common sense, after all, dictates that the more eyeballs a seller is able to garner for a property, the greater the value and the terms will be. An agent or a financial advisor who has a responsibility to get the best value for his seller needs to have as many buyers as possible jostling for a deal. Limiting the prospective buyers to a select few clearly violates that responsibility. Banning pocket listing “allows everyone to do what the sellers have hired them to do: get the highest price with the best conditions in the shortest amount of time,” says Anne Koons, an agent for Berkshire Hathaway HomeServices Fox & Roach.
No, They Should be Regulated, and the Window for Pre-Advertising Should be Increased
Meanwhile, Chris Somers, president of the Greater Philadelphia Association of Realtors and CEO of the Somers Team with Keller Williams Philadelphia, argues that while he supports the new policies of Bright MLS and the National Association of Realtors to some degree, he says he does so reservedly; “The ideal regulations should respect the two most critical components in our industry: (1) there needs to be full transparency to the consumer, and (2) cooperation is essential in our business,” Somers says.
“Having 24 hours to submit.. listing to the MLS.. might not be a long enough window in certain sales,” Somers adds. “The big picture also affects the impact of this policy. We’re in a sellers’ market, where oftentimes there can be multiple offers, and half a day, let alone one day, can make a difference whether a buyer can get an offer accepted or not. Once the market shifts to a buyers’ market, this debate will pretty much be a nonissue, as every seller and agent [and financial advisor] will want their listings made public ASAP for maximum exposure — which should always be the default.”
Based on Materials from Inquirer.Com
Photo Credits: Pixabay